How to Structure Creative Finance Deals - Masterclass Video 2 w/ Pace Morby

peace welcome back to this series guys if you missed part one you make sure to go watch that we're doing an entire series on creative financing in part one we did this big overview we gave some examples we talked about all the things we're going to cover in the series it's kind of like a broad overview of creative Finance why it's so important and again below this video and in all the videos in this series we'll have the playlist link so you really can go through and it's kind of like a library of creative Finance strategies A to Z the whole thing in part two this video we're going to really talk about uh structure and understanding the instruments some of the vocabulary pace and I feel very strongly that we really can't dive into these techniques if you don't have a really good overview of how the instruments work together when you really understand that then it opens up an entire new world because now you can use these instruments to work together to really put together some amazing deals yeah it's powerful for example we had my first deal I ever did have you ever heard my first still story it's the most important story of my life it was a cash deal yeah yeah it's I'll tell in three minutes somebody convinces me go send out postcards so I go send out postcards I get three phone calls I miss the first two the third the third phone call that comes in is a lady named Janie Munson okay so Janie Munson retiring school teacher moving from Arizona to Oregon these are important details by the way okay it's not always about comping the property and this is the most the most important lesson I ever learned in real estate was on the first deal I ever did and it ties into what we're about to talk about so Janie calls me up and I go hey this is pace and she says I want to sell my house come up and take a look at it I drive up there on the way up there I call um the person who convinced me to get into postcards I go dude what do I do I don't even know what to do this is before you had like your channel was like known and so I um I go what do I do and they say offer the lady 250 000 and I'll buy the deal I go okay I don't know what to say what to do whatever so I drive up there I meet Janie we build rapport we have a great conversation and I go so Janie why haven't you sold the house yet great question to ask a seller by the way yeah why haven't what's kept you from selling the house so far right great question write that down it's one of the best questions you could ever ask and this and she says well I'm looking for 280 000 and the highest number I've received is 275. and you're coming in there at 250 yeah with no skills right no skills and not knowing creative Finance not knowing anything else if I knew creative Finance I would have immediately jumped to a different number but again I guys we don't start with creative Finance we start with cash always start with cash in a conversation with the seller because it gets you into the game helps you build rapport and gets you to understand what the other investors are offering so you can see all the pieces on the board so here's what happens she says I got an offer at 275. I say Janie I can't help you I'm sorry so sorry I wish I could help you but I'm way below here and she goes well give me your number I go I've been it I would be embarrassed to give you my number you're a school teacher you're about to retire she goes okay well let me show you out so as I'm walking out the door I turn around I go Genie is there anything else I can help you with I know I'm not not buying your house is there anything I can help you with she says I'm confused you want to help me but you also don't want to buy my house I go well I'm a contractor I have guys I have resources if you need help loading your truck she says I'm pretty good on that but I do have a major problem I go okay what's your problem she goes come in my backyard so I go in the backyard and she shows me these three bunnies that are this big oh this is the bunny story I do know the bunny story Bunny's going this is a great story so she shows me these Cadbury egg bunnies they're the mo they're like donkeys that look like how many were there three okay and so she goes I need to re-home these somebody gifted them to us their sentimental value my granddaughter is involved the whole thing I wish I would have known you then because my kids bread bread and sold bunnies I would have see this would have solved my problem right so what I did instead is I go I'd be happy to help you so who do I call the most trustworthy person in my world I call my mom and my mom who had a farm at the time she was up at the property with me and Janie in less than 40 minutes with a truck took the bunnies and I gave Janie a hug and I left two weeks later bunny problem solved her bunny problem so Janie calls me two weeks later and she's like I have been waiting for your phone call for two weeks and I was like I I don't understand she's like I thought you helped me with the bunnies so that you could manipulate me into selling the house to and I go no I just did it to help you I'm I I can't buy your house and she says we'll pay us after two weeks of thinking about this I want to sell my house to you um I don't even care what the number is I want to sell my house to you and I'm like blown away I don't even know how to react to this and I go what did I do and she said here's what you did you looked for what you could actually help me with nobody else cared about me where I was going what I what I did for a living nobody told me about their favorite teachers they had in elementary I told her about Mrs Heredia Mrs Rose my favorite teachers we connected on that we built Rapport I genuinely cared about what was going to help the lady and I realized I didn't have the tool to tell to help her okay so number one I could have helped her with creative Finance easily I didn't have that tool so what ended up happening is I drive up to the property I pay 250 for the property I sold it to the next person and I made twenty five thousand dollars and I drove away and I call the guy that I sold the deal to and I go dude I can't believe I got it for 250 he goes what did you do how did you get the deal and I said I found the bunnies and he's like I don't get it and I go I found the only problem she had and nobody else did and so when you guys are going into these strategies cash creative whatever it may be you have to be looking for the seller's major problem and it will be like an if this then that type of scenario so if the seller doesn't have Equity then it's going to be a sub 2. if the seller so you have to find the bunnies you have to find the problems in the scenario so you can use the proper paperwork the proper strategy the proper scenario in order to to win this stuff but I think Pace the the bigger lesson I learned from that is that you truly do put people first always it's people first and that's what's made you so tremendously successful learning the mechanics of all of this stuff you can learn right but what's allowed you to really do create a financing well and and really all of your real estate investing and your coaching business is that you connect with people and you care about people it's not a technique so that you'll get what you want it's not manipulation so you'll get the contract people feel that that they'll map that they'll read that and so guys I think the biggest thing I hope you take away from everything I try to do pace for sure what he tries to do is if you really do have a servant heart and you really do want to bless lives and make a difference then you can win and make a lot of money and the seller win too it's a win-win is a real thing an attitude of servitude is what my mom always told me and um here's what was great about this that first contract I spent five thousand dollars in postcards I got one contract out of it so it cost me five grand about out 30 days later I look back at all my leads from that last month and I saw a massive amount of people I couldn't help and I was like man I found the bunnies in Janie's life literally but I can't find the figurative bunnies in other people's lives these people want too much money they're CR out of their mind I used to tell people I used to think people are out of their mind and then I realized they just needed seller finance then I was like man these people don't have any Equity what the heck how am I supposed to make any money I can't help these people they CA and then here's what ended up happening this is how I got into creative Finance I bumped into a lady um she her her she's epic Eileen Brown have you ever done a deal with Eileen Brown 48 years as an escrow officer primarily around creative Finance so I go in I open escrow on Janie Munson and I'm having this we do this deal she sees I made twenty five thousand dollars and um Eileen Brown basically tells me she goes if you ever run into a seller that doesn't have Equity or wants too much money come to me I'll help you walk through it this Eileen Brown changed my life I took all these leads and I went to Eileen Brown and she taught me these instruments that Jerry and I are about to talk to you guys about no deed of trust me all the all these things will help you solve sellers problems at such a high level you need to truly understand the documents and the terminology that are involved here in order for you guys to not only make money for your family but to help other sellers because the last thing I'll say we'll get into this it just is this this important right now in Maricopa County there are 20 people a day that get foreclosed on every single day Monday through Friday a hundred people a week get foreclosed down in Maricopa County I don't know what it is in your county or where you're at but it's a lot of people and the reason being is because the agent the wholesaler or other people that interface with these sellers did not have don't understand it they don't understand it it's not just the creative Finance it's also the paperwork all of those people could have prevented that foreclosure 100 percent and and been great and done well and been okay and prevented foreclosure and a seven year record on their and it's not just even the the record it's also the psychological thing that the displacement yeah it's like I'm a failure I'm a pariah so like in my Social Circle I got foreclosed on I'm embarrassed imagine what that does to somebody's psyche for the next 25 years it's painful for people yeah yeah so preventing that so let's uh and by the way just one more thought I'll add to that is my Eileen Brown actually for me happened to be getting my real estate license and then later my broker's license because going through that training it helped me really understand how all these instruments work how Deeds work how title works and so that allowed me to have such a deeper knowledge of real estate transacting right that then allowed me to say well what if we did this and we put this together and we we start to do some of these ideas here around creative financing and to help me at such a big level so however you're doing it let's make this video kind of that overview but really take the time to educate yourself on how these instruments work because the more you understand the instruments the more creative you can be in how you structure deals right and you got to remember that human beings created these instruments in the first place so you can take these instruments and use them how you need to just like the human beings before us did so first one I would say is that in real estate people commonly misunderstand two different pieces of documents okay they they misunderstand the owner of the property and they misconstrue it as the mortgage or the deed of trust and people don't a lot of people don't even use know the word deed of trust is different than a mortgage but also similar very very similar right the only difference is well let's go let's go through this high level so how do we know who the owner of a property is their name is on the deed okay so deed take the word deed if I want to if I'm the owner of a property it means I have the deed right my name is on the deed if I want Jerry to be the owner of the property I literally can sign the deed over to Jerry and Jerry is now the new owner of the property now people also misunderstand the word title and deed yeah okay so think about this is a very easy way to understand it deed is who who owns the property and title is how they hold the ownership right so title could be like tenants in common or these types of things that is title the deed like if I go look up County records and I want to see who the owner of the property is I'm not looking up title I'm looking up who has their name on the deed so the deed is the receipt of ownership so then it could be multiple people it could be entity it could be these different things that and that's the title right and if Jerry and I go and there you go that's it so if Jerry and I wanted to own a property together hit my LLC and his LLC would be both named on the deed as the owners of that property or the named owners but then how we hold that property whether it's tenants in common or sole proprietorship or a partnership or those types of things that's title yeah right different states have different things with how marriage works right so there's these different ways that that you can hold the deed but the deed is the ownership of the property and that gets recorded right and there's a history of that too that's very when you say recorded this is also a common thing that people misunderstand I'm glad you're bringing that up what does that mean what does that mean what does it mean that it's recorded okay so every single County in the in the country have has a recorder's office right where we um you can record you can see permits that are being pulled you can see the most amazing data ever like if Jerry gave me a personal loan and he says well how do I make sure that you're going to pay me back how do I make sure I have security with that loan I go well why don't you record that loan against my property as a lien that document shows up at the county recorder's office as public data yeah it's notice to the world yes it's letting the public know by that recording because now anybody can look it up right my wife did a video about this about two months ago on her YouTube channel where she goes watch me go record a document at the recorder's office it costs 17 in an hour of your time yeah so you can record just about you can walk down there with it and they'll right it takes about uh so you can record it let's say today's Monday by the end of the week it'll show up on public record that there's a recorded document against that property which is great right so um now let's say that I you know long long long time ago they started creating financing right back at like thousands of years ago it was like I had to trade 17 goats for to buy a shack but then Banks came in they go man we can loan people money and they'll pay us interest and then they created the 30-year mortgage and people are like wait what the heck is a mortgage well a mortgage is our ability to go buy something with the bank's money right and that agreement of what your the basically all the terms of that agreement are in that mortgage but guess what there's another confusing word this is where people also get tripped up is that I you could have a mortgage in some states but other states it's not call a mortgage it's called the deed of trust and that's really simple Google to know what your state is if you don't know right you should do it but this is creative not just creative Finance but real estate in general is very confusing because didn't we just say the deed is who the owner is but then we also said that the deed of trust is a debt they actually these have nothing to do with each other but they they they used a similar word deed in both of them so it can trip you up it's very complicated so what happened is a long time ago people started using the word mortgage and deed of trust synonymously because it was more simple to just say mortgage but the reality is in Arizona we're not a mortgage State we're a deed of trust State and people actually are technically using that wrong when they say my mortgage they're they're actually referring to the loan not the mortgage right there is no Mortgage in Arizona there's a loan right but so what you're saying is guys commonly you're using the word mortgage incorrectly because the mortgage is a very specific instrument in the loan process right and it's important to know that because if you don't understand the differences between these these instruments then you how could you possibly do creative financing if you don't understand this and this so this is where this is a good breakthrough for people is that I always ask people I'll ask people today on stage where both you and I are speaking at a big event with like 1500 people today and I'll ask people I'll go have you ever bought groceries at a grocery store with a credit card and people go yeah of course we do that all the time I go great so you're going through the cashier cashier tells you what you owe you pull out your credit card is that your money and people like no that's actually somebody else's money that's American Express's money right it's not my money American Express just to proved me to use their money that's what a credit card is American Express approved me to use their money they didn't give me money they gave me the approval to use their money and pay them back at a later date that's a credit card so um essentially I'm pulling out my credit card I pay for that bag of groceries and now the cashier's job is to transfer the ownership to me how do they do that well they take the receipt and they hand it to me and they go you are now the lawful owner of the property the groceries and so the receipt of those groceries is the deed okay so in real estate the receipt is the deed I can give this is what's crazy I can give the groceries to Jerry and the receipt and guess who the new owner of those groceries and receipt are Jerry even though the money is still owed to American Express yeah Jerry doesn't know American Express you still owe American Express there you go and so you have to realize that the debt I owe more American Express is not the ownership American Express doesn't own my groceries I own my groceries because I have the receipt but there's an agreement between American Express and me the owner and in real estate that is called a promissory note there it is literally a note one document usually one piece of paper it's a note that I promise to pay American Express back therefore we call it a promissory note and that promissory note is the agreement between the two parties and that includes things like interest rates due dates penalty when it gets paid off all of the things pertaining to that agreement right but where the mortgage or deed of trust now comes into factor is that now there's a security there's a security right so if you think about American Express what's interesting is there is no security right because if let's say that you let's say that you don't pay that money back from the groceries right they're not going to come repossess those groceries because they did not collateralize the groceries to the payment it's an unsecured loan now you have with American Express now you'll wreck your credit and cause all kinds of other problems in your life if you don't pay it back but in real estate that's the powerful thing about um Chase Bank of America Zions Bank whoever is they give you the money right they approved you to go buy a house with their money what they're doing is they're putting that agreement that mortgage against the property in the form of a lien in first position they're the first position holder means you're the owner you have the receipt or the deed in your name but the mortgage company who let you buy this house with their money they go if you fail to make this payment we have the right to take the property back and sell it to get our cap capital back so the mortgage or deed of trust is collateralizing or securitizing the promissory note it's basically saying in the event that I default on this note I'm giving Chase or Wells Fargo or Bank of America whoever the lien holder is I'm giving them I'm agreeing that they can repossess the asset that they collateralize the loan with yeah right so it's important to understand that that that there's two documents the promissory note but the mortgage or deed of trust dependent on your state is what securitizes that loan and that's what makes real estate such an amazing asset because you can securitize the actual property to the loan it's what it's what makes real estate the greatest investment of all time the best because you can't do that with a lot of other and you don't securitize stocks right right you know what's interesting is this is a weird analogy but when I hear the word lean here's what I think of in my brain I used to be a painter and I know you've done a lot of construction as well and I would watch my paint my paint Crews they would put a big tall ladder up against the property and they would lean the ladder up against the property and when my painter would want to come and spray that portion of the house he'd have to remove the ladder or the lean against the property in order to paint and so a lean great analogy right so I look at this ladder leaning against the properties like I can't do anything with this house until the ladder is pulled off so think about a ladder up against the property as a lien so when somebody says well I need a personal loan Jerry Jerry will you give me 50 Grand Jerry goes yeah if you let me put a lien against the property so you can't do anything with it until you pay me my 50 Grand back that's how I learned lean yeah I learned all this stuff through thinking and now through analogies like a leaned ladder prevents me from doing things on that side of the house and these mortgage and deeds of trust they prevent me the owner the guy who holds the receipt I can't do anything with this property um I can't refinance it and I can't sell it without paying off that debt is what I believed I believed that for a very long time and I realized that as long as somebody is willing to take over that debt in the exact situation it's in I could transfer the ownership over and I when I had that Epiphany I was like game changer you're joking me yeah and like the third deal I ever did okay there was this is really ironic okay there was a a guy who got a divorce and he was going through a hard time and he owned this property and had no equity he's an agent by the way too and he says I would love I go I'll buy your house subject too and he goes I can't sell it to you subject too because I have not only do I owe Wells Fargo my loan I go I can take that over no problem he goes well I have a problem I have a painting company that charged me 15 grand and I never paid them they have a lien against my property a mechanics lien and ironically I was like I already knew the painting ladder scenarios like oh I can take over that lean I'm okay with a ladder leaning up against that property and so I call I took over not only his first position loan but I took over a mechanics lien in second position and I didn't have to make payments on that paint thing for like six years and then when I finally sold the property I called the painting company go I know you wrote 15 grand plus penalties and blah blah I'll pay you 2500 bucks and there's like something's better than nothing they took it yeah they took it so when you understand these little things like first position second position third position you it's like playing Monopoly with like your own so Pace going back to this uh deed that gets recorded meaning it's now notice to the public it's at the county level everywhere we go it's at the county level that now puts that uh ownership of that property and if you're the lender you're the bank or in this case a mechanics lien you also record that lien on the property so now when they do what's called a title search they're going to look at what's what's publicly on notice about that property so you're going to see liens and and the positions so positions is important because in the event that pace gets hit by a bus and they sell the asset who gets paid back well it's in it's based on priority so the first lean position it's not split evenly by everybody first lean position gets all their money first if there's any money left over a second lien position would get all their money money if there's a third and so whatever's left is is based on lean priority so think about it this way I've got a let's say I go buy a truck right and I go to Jerry and I go hey Jerry I want to buy this F-150 right and Jerry goes yeah I'll get what do you need and I go I need 20 grand the the cost of it is 20 grand and Jerry goes well it's only worth 20 grand but sure I'll give you 20 000 bucks so Jerry gives me 20. I now owe Jerry 20 000 right there's an agreement between the two of us called the promissory note okay so Jerry then says we put an agreement together that says if I go to sell that truck or I refinance it or I crash it in the future the insurance payout doesn't come to me it goes to Jerry before I get anything okay so let's say three months later I decide I want new wheels and new tires and I want a new audio system so I go to my other buddy Jamil and I go Jamil will you loan me 10 grand soup up this truck let's soup up this truck that's only worth 20 grand in first who's in first position Jerry Jerry Who's in second position Jamil Jamil because he it's always an order of recorded date okay so Jerry recorded his his uh D or not his D but his deed of trust or his mortgage or his the debt first Jamil came in second so let's say I go off and I get in a wreck in this truck my insurance company goes okay we see the truck is worth 20 grand who's getting paid Jerry Jerry's getting paid 20 grand because he's in first position guess what Jamil is s o l so typically you don't want to be in second position unless it there there's something in it for you or you understand the risk it's higher risk yeah and let's say you let's say because of those upgrades you were able to sell it for 25. there you go Jamil would have gotten you would have gotten five Jerry 20. so Jerry gets paid first first lean position gets paid first and that's why most banks will only be first lien position because they want to protect their interest right so in this situation Jerry was the bank in real estate right that's the bank I go to him for a first position I then go to Jamil as a private money lender or hard money lender in second position because they're willing to do more risky loans at a higher interest rate so and I think it's important to say here it doesn't mean second lean third lane Junior lean positions are bad because they could have a ton of equity and they're you're still really protected right it's all about the deal the position the equity but these second and third lean positions can be amazing instruments which we'll talk about but it's just right now we're just trying to really focus on understanding how these instruments play a role yeah in real estate you've got you know you've got the paperwork that needs to make make sure you're straight and narrow and people will ask these questions especially in Creative Finance first position second position third position and sometimes a fourth Position will pop up where there's additional lenders and you just need to understand the order like the Jerry thing with the truck helps a lot I tell people that story and they go I didn't understand it in real estate but now I understand it in general and now it makes me understand in real estate too if I go down to the bank and get a loan they're in first position if I go get a home equity line of credit they're in second position against the property because I now want to do improvements and I think it's important that people understand too that the government supersedes all lean priority yes in other words if Wells Fargo's in first lien position but you don't pay property taxes the the state or County could foreclose on non-payment for property taxes and override the bank's first position which is why the banks will step in and pay that right so here's here's where this comes in handy we'll talk about sub 2 and seller finance coming up next in the next video but let's say I find a seller that has no equity in the house and the seller says hey I've got this loan with Wells Fargo three percent my payments 1500 bucks a month I'll literally let you take that over and I'll transfer the deed to you you therefore the new owner that's subject too but I want you to pay for my moving expenses which are five grand and I and now I also as the buyer I got to pay the closing costs crap okay well I'm brand new what do I do in that situation that's probably ten thousand dollars I gotta come up with I don't have ten Grand well option one you can wholesale it to Jerry or to me or thousands of other creative Finance buyers or two you can go get a private money lender that brings 10 grand to the table kind of like Jamil did in that truck scenario and says I'll give you the 10 grand and I'm willing to go in second lean position as long as you make me a monthly payment right so this is why it's important for you to understand first lean position second lean position and where that money comes from in fact I just did a deal where an agent got paid a wholesaler got paid I paid the closing costs and furnished an airbnp the Airbnb all with a private money lender that was willing to go into second lien position and I'm in the deal with no money out of pocket in fact another scenario that's really great example is a lot of my Fix and Flip deals I do first lien second lean where I use hard money in first lien position because they'll give me 80 percent of the money you know purchase and repairs well now I'm short twenty thousand or twenty percent let's just say twenty percent now I'll go to a private money lender and I'll say hey give me the remaining 20 I'm short I'll pay you whatever right interest and whatever but now you're in a second lean position behind the hard money lender which now allows me to be a hundred percent financed on the deal but again I can't put a deal like that together unless I understand first and second lien positions how notes work how how a mortgage or Adida trust works so that you can get all these all this paperwork put together and I was um so people ask me why did it take me so long to get into real estate and you want to know why why because I didn't understand what you just explained literally what Jerry just explained kept me the the missing this is where you did a thousand deals for other flippers I did 7 000 Renovations for Open Door offer pad Zillow and other flippers before I ever did a deal for myself because I thought you had to have the cash I thought I had to have the cash I didn't understand first and second lean positions which we're explaining to you now where I'm like okay I get the hard money I get the hard money I can go to a hard money lender but that sounds like a mobster hard money and nobody sat here and explained it to me and go dude there's literally thousands there's probably more hard money lenders than there are Starbucks offices okay literally there's that many hard money lenders and so you can go to a hard money lender for your first lien position and then you go to a private money lender that gives you your second lien position and the last I don't know 700 flips I've never used a penny of my own money I wish I could jump into a time machine 20 years ago and tell myself dude you literally don't need any money of your own you need to unders to understand first lien position second lean position and where that money comes from it's interesting I I uh I did a deal recently where the hard money loan I did was like 500 000 was the hard money portion and then the other part that I used private money for was like a hundred thousand and I'm talking to this private money lender and I said uh I said yeah you're going to be in second position with your 100 000 but it's okay there's lots of equity you're you're still protected with a lien but you're and they said well why would I take a second lien position and I said well if you have the 500 000 and you want to be first lien position we can do that right and they're like well I don't have 500 I have a hundred that's why your second lien position right right and so they they're like I get it okay I get it yeah I'm willing to take a little higher risk by being in second lien position because I'm getting my hundred grand to work and I don't have enough Capital to to beat the first lean position hard money lender what I find with private money too this is a whole nother video you and I can make at some point in the future is like where does private money come from but the people that are in my world that lend our private money are people that are like doctors lawyers attorneys traveling nurses Engineers whatever people that make over six figures they don't have any time to invest in real estate but they want to learn and be part of a real estate deal and so I call them um they're like beginner swimmers they're like they want to become a loan shark but right now they're just like little guppies and they go teach me like I want to be part of a successful transaction so most private money and a lot of them have um Ira money that's just sitting there that can be doing nothing yeah and so what they'll do is they'll go man not only am I going to get a good return that's safe even it's it's in second position it's a very safe secure loan but I get to learn how did where did the deal come from how is Jerry doing the deal how is he blah blah blah blah how did he exit the deal you'll get a million dollar education so the people that are private money lenders are typically individuals that want to learn or be part of successful real estate transactions those are people hard money lenders are businesses that are like this is what we do for a living we lend money right and this is important because I think Pace you know in the perfect world you put together create a financing deal and it's a hundred percent Finance zero out of pocket you do a ton of these deals it's incredible to see you do all these deals where it literally it's zero out of pocket but there are some cases where it's still a creative financing deal and there's some money needed to put put the deal together and being able to pull in this outside private money it's about 70 percent of the deals I do requires that yeah thirty percent of the deals I do don't require any of it and um I do those they're a lot of fun and they're great but you're not going to get that 70 percent of time you need to understand where you're pulling money from and it might be five grand ten Grand or whatever it is usually it's not a lot of money but being able to leverage other people's money to then come in and and meet that that part that is Cash can help you really put these deals together and at the end of the day you're still 100 financed it's still zero out of pocket you just were able to leverage existing debt bring in some private money and so becoming one of these you know structuring Engineers is like how you really call it a transaction year oh love that yeah transaction here so you're you're engineering a transaction and you're looking at the pieces that are there and you go okay the seller has a first lien with Wells Fargo seller wants 20 grand wholesaler brought the deal to me wants 10 grand I gotta get the furniture for the Airbnb okay I need I call that my entry fee all the all the capital that's needed to make the deal work and where do I get that from I go to a private money lender or even a partner okay depending on what resources and relationships you have I could bring in a private money lender and create a second note and now I have two loans on the property the first position I took over sub to the second position we created a seller finance note are not a seller finance note but a private money note or when I first started I didn't understand it so what I was doing is I was partnering with people partnering yeah and if I knew that I wouldn't have been giving away so much stink and profit I used to give away 50 of my profits to the private money lenders yeah and I go wait there's such thing as second lean position debt versus Equity yeah well you know Pace Pace I think like your number one asset and I would probably say this about me as well is your ability to structure deals and when you're new that's overwhelming but it's like reps you know put the Reps in really I mean so is comping a cash deal that's right when you first knew it feels overwhelming but when you I think if you could learn real estate and really learn how to structure when I and when I say structure it's all this stuff it's being able to pull these different things and put stuff together and walk out of there with this amazing deal that's kicking out cash flow or whatever it is you're going to do with that deal three things you can do with it with a creative Finance deal is you can wholesale it you can fix and flip it or you can buy and hold it you can do anything with creative Finance so whatever it is that you decide to do what you've got to do is you've got to figure out put all the pieces on the table right you've got to see what what's their existing debt if they don't have existing debt well then we're gonna have to create some existing debt and we'll talk about that in the seller finance video coming up yeah so guys this is really exciting learn how to be a structure transaction here learn how to be a trans that's awesome okay guys if you have any questions about any of the instruments or lean position or any of that we talked about leave a comment we want to make sure you're clear about this you you really can't go into these next things and we're not going to be able to like explain every time we say lean position or note or whatever so be sure to really make sure you got your head around this so that these other strategies will make a lot of sense so our next video guys watching the series here the next video we're going to actually dive into the first creative financing strategy which is seller financing or owner financing and we'll do a deep dive on that one so watch for that video we'll see you on the next video

Channel: Flipping Mastery TV

Views: 85,327

Keywords: real estate investing, wholesaling houses, wholesaling real estate, wholesaling, wholesale real estate, real estate wholesaling, real estate investor, jerry norton, how to wholesale houses, real estate training, wholesale, wholesaling houses 101, flipping houses, real estate wholesale, how to wholesale real estate, wholesale real estate for beginners, subject to real estate investing, sub to, subject to, pace morby, creative finance, seller finance, sub2, sub 2

Id: pvgEqb4r4gw

Length: 36min 23sec (2183 seconds)

Published: Tue Nov 08 2022